Labour Court Database __________________________________________________________________________________ File Number: CD86810 Case Number: LCR10920 Section / Act: S67 Parties: ERGAS LTD - and - SMAUI |
Claim on behalf of two sales representatives for an improved mileage allowance.
Recommendation:
5. The Court recommends that the Company's offer for mileage up
to 12,000 miles be accepted and that the rate for mileage above
that be increased to 19p.
Division: CHAIRMAN Mr Collins Mr O'Murchu
Text of Document__________________________________________________________________
CD86810 THE LABOUR COURT LCR10920
CC861512 INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
RECOMMENDATION NO. LCR10920
Parties: ERGAS LIMITED
(REPRESENTED BY THE FEDERATED UNION OF EMPLOYERS)
and
SALES MARKETING AND ADMINISTRATIVE UNION OF IRELAND
Subject:
1. Claim on behalf of two sales representatives for an improved
mileage allowance.
Background:
2. The Company operates a scheme whereby sales representatives
and other employees who use their own vehicles for Company
business are compensated for expenses incurred. Up until 1985,
the arrangements that were in existence provided for the payment
of a combined system of #3,150 per annum and a mileage allowance
of 12.3p per mile. Following advice from its auditors that the
scheme was not strictly in accordance with the tax code, the
Company proposed a new scheme whereby employees driving up to
12,000 business miles per annum received 38p per mile and those
driving more received 17p per mile after that. This was rejected
by the Union and as local level discussions failed to resolve the
issue it was referred to the conciliation service of the Labour
Court on the 3rd September, 1986. A conciliation conference was
held on the 14th October but failed to resolve the issue and on
the 22nd October the matter was referred to the Labour Court for
investigation and recommendation. A Court hearing took place on
the 26th November, 1986.
Union's arguments:
3. (a) Under the old scheme, the claimants received an annual
allowance of #3,100 plus 12.3p per mile. In 1985, the
Union sought a revision of this to an allowance of
#3,350 plus 18.32p per mile, which would give parity
with the Company's main competitor. This other
competitor now allows #3,520 plus 18.32p per mile which
over an average of 25,000 miles per annum gives #8,100,
while the Company's proposal gives only #6,770 over the
same period/mileage.
(b) The Company informed the Union that the new figure was
computed entirely on the basis of the Automobile
Association's (A.A.), figures being used. Having seen
a copy of the computation the Union pointed out that
the A.A. figures needed correction on a number of
points if meant to apply to business motoring. It
advised the Company that the write-off period by the
A.A. was for a used car (at#5,600 cost), over eight
years, while the actual cost (April, 1986), in this
case would be #8,500 with a life of only four years.
The cost of insurance would also be substantially
higher (50%) due to the requirement to insure for
commercial use. The crux of the dispute centres on the
standing charges computation which the A.A. total at
#2,610 and the Union totals at #3,675 (details of both
computations supplied to the Court). The Company
should amend the offer to 47.98p for the first 12,000
miles.
(c) The Company also proposes to reduce the A.A. figure of
#2,610 by the deduction of #156 which it refers to as a
garage allowance. However, the two claimants do not
receive any such allowance, which incidentally is also
incorrectly titled as it is a storage allowance.
(d) In addition, the public service rates as of the 1st
January, 1985, gave #7,989 per 25,000 miles.
Company's arguments:
4. (i) The new mileage allowance arrangements are much more
lucrative for the two employees concerned (details
supplied to the Court). Furthermore, because the
average mileage per annum would be approximately 30,000
miles, the Company would argue that the workers
concerned are considerably better off as a result of
the new system, notwithstanding the fact that the 1985
review of the old system did not take place.
(ii) This new system has been brought into operation across
the board in the Company and has been fully accepted by
all other parties.
(iii) Faced with the objections raised by the Union, the
Company offered to provide Company cars to the two
employees concerned but they rejected this offer.
(iv) The new system is a very attractive one for employees
who are driving up to 30,000 business miles per annum
and there is no justification for any further
adjustment in the scheme. Additionally, it would be a
cause of grave concern for the Company if any changes
in this revised system were to take place as it would
have very substantive repercussive cost effects on the
operation.
RECOMMENDATION:
5. The Court recommends that the Company's offer for mileage up
to 12,000 miles be accepted and that the rate for mileage above
that be increased to 19p.
~
Signed on behalf of the Labour Court
John M. Horgan
_____________________
Chairman.
16th January, 1987.
D.H./J.C.